Do you think the price elasticity of demand for Ford sport-utility vehicles (SUVs) will increase, decrease, or remain the same when each of the following events occurs? Explain your answer.

a. Other car manufacturers, such as General Motors, decide to make and sell SUVs.

b. SUVs produced in foreign countries are banned from the American market.

c. Due to ad campaigns, Americans believe that SUVs are much safer than ordinary passenger cars.

d. The time period over which you measure the elasticity lengthens. During that longer time, new models such as four-wheel-drive cargo vans appear.

• a. Other car manufacturers, such as General Motors, decided to make and sell SUVs.

The price elasticity of demand for Ford SUVs will increase since there is the availability of substitutes.

• b. SUVs produced in foreign countries are banned from the American market.

The price elasticity of demand for Ford SUVs will decrease since SUVs from foreign countries will note available in the American market, meaning that there will be fewer substitutes for Ford SUVs

• c. Due to ad campaigns, Americans believe that SUVs are much safer than ordinary passenger cars.

The price elasticity of demand for Ford SUVs will decrease. Following an increase in price, the consumers will be less responsive because they believe that SUVs are much safer than other ordinary cars.

• d. The time period over which you measure the elasticity lengthens. During that long time, new models such as four-wheel-drive cargo vans appear.

The price elasticity of demand for Ford SUVs will increase. The demand elasticity is higher on longer time frames because consumers have ample time to respond to a change in price.